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How the Average American Family Spends Their Income and Where We Believe They Can Save the Most in 2020

EVERYDAY SPENDING IS KEY

Have you ever wondered about what the average American family household budget is? What do most families spend their monthly income? Or where your household is ranked among all others? Are you paying more or less than the average family in your same income bracket? And is there anything you can do to help improve your spending habits?

Most people think about these questions from time to time, especially when the economy is unpredictable. Many homeowners find themselves looking for ways to save money and reduce their spending to improve their budget and prepare for the unexpected. The best way to ensure you are making the most of your family’s income is by breaking down your household budget and creating a plan.

Why is it Useful to Create a Budget Plan?

When you take the time to write down everything you spend money on each month, take a step back and get a clearer picture of where your money is going. That is an excellent method to use when you want to reduce your spending and save as much as you can.

Creating a spending list lets you separate your necessary bills such as your mortgage payment and utility services from those that you could live without if needed, such as streaming services or club memberships. As you work on your list, you will likely notice you are paying out more than you realized for services you rarely use. Creating a budget plan is helpful because you can quickly eliminate some services and cut down on your spending.

The Breakdown of an Average Family Household Budget

Based on information from the U.S. Bureau of Labor Statistics, the average household in the US earned $78,635 annually in 2018. However, their average spending added up to be $61,224. That means most families spent close to 80% of their income without putting anything into savings.

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Ways to Trim Your Budget and Save Money in 2020

Taking a closer look at your budget helps you decide what you need and what you don’t. You also get the chance to look forward to the future. Here are a few suggestions for trimming your budget and improving your spending.

Entertainment

Cut down on your streaming services if you use them. These days there are so many streaming TV and movie providers, and it can be easy to sign up for each one because of their low monthly fee. But if you have several streaming services, those small fees tart to add up to big numbers. If you don’t want to go back to cable or satellite services, consider a streaming provider that offers more channels, allowing you to have more diversity and viewing choices with one single service.

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Education

Consider a more affordable, cost-effective college or university. Also, apply to grants and scholarships as much as possible.

Everyday Spending

  • Consider eating more meals at home instead of dining out, or pack a lunch from home to take to work
  • Look around for better health care plans and learn more about your options for more affordable insurance
  • Save money on clothes by shopping at thrift stores or checking out online options for gently used clothes

Getting started on a budget plan is a great way to improve your family’s spending habits and allow you to start saving more money so that you will have something to rely on in an emergency.

Subscribe to Your Money Magic to learn more about creating a budget plan,

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Written By Lauren Wurth

Lauren Wurth is a content team member who is passionate about sharing engaging content! She has a history of writing content for retail, lifestyle, and entertainment verticals. Outside of work, she enjoys spending time with her family, stopping by Dunkin Donuts for a coffee, and exploring other parts of the world.

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